SFB 303 Discussion Paper No. A - 288
Author: Karni, Edi
Title: Optimal Insurance: A Nonexpected Utility Analysis
Abstract: This paper reviews some of the recent developments in the theory
of decision making under risk and apply them to selected problems in
the theory of optimal insurance, namely, the choice of optimal
insurance coverage, and the comparative statics analysis of the optimal
insurance coverage with respect to the consumer's risk aversion. The
analysis highlights the methodology of local expected utility analysis.
Keywords: Nonexpected utility, expected utility with rank-dependent
probabilities, weighted utility, optimal insurance.
JEL-Classification-Number:
Creation-Date: May 1990
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